Good morning! Goldman is on track for near-record M&A volumes this year, with dealmaking approaching 2021 peak levels. KKR is expanding its Italian presence with a planned Milan office. And Groq is raising up to $650 million from existing investors after its $20 billion Nvidia licensing deal saw much of its senior team walk out the door.

Microsoft's AI chief gives it 18 months before all white-collar work is automated by AI. New York passed Mamdani's pied-à-terre tax on second homes valued at $1 million or more. And Anthropic raised $65 billion in a Series H at a $965 billion post-money valuation, leapfrogging OpenAI, which was last valued at $852 billion.

Plus: Caesars Entertainment agreed to a $5.7 billion Fertitta takeover, and a court ruled against Apollo's Marc Rowan in a Hamptons lobster shack dispute.

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SQUEEZ OF THE DAY

Harvard’s PE Hangover

Harvard’s next endowment boss may inherit one of the least fun jobs in finance: managing a $57 billion portfolio with a private equity hangover.

The issue is not that Harvard invested in private markets. Every major endowment did that. The issue is that Harvard went big, and now the timing looks awkward. The university’s unfunded commitments to private equity funds have climbed from $4.6 billion in 2017 to $7.9 billion in 2025, leaving the endowment with billions of future checks it may still need to write at a time when Harvard is facing more pressure for cash.

When an endowment commits money to a private equity fund, it does not wire the full amount on day one. It promises to provide capital later when the PE firm calls it. That is fine when older funds are selling companies, sending cash back, and keeping the machine moving.

It gets uncomfortable when exits slow, IPOs freeze, M&A weakens, and distributions dry up. Then the endowment is still getting capital calls from newer funds, but the cash coming back from older funds is not keeping pace. That is the private equity hangover.

Harvard leaned hard into the trade under endowment chief NP “Narv” Narvekar, who reportedly plans to retire as early as 2027. When he joined Harvard Management Company in 2016, one of his priorities was to increase exposure to buyouts, growth equity, and venture capital.

The allocation to private equity rose from 16% in 2017 to 41% in 2025. That looked brilliant in 2021, when the endowment posted a record 33.6% return during the private-markets boom. Then rates rose, exits slowed, valuations reset, and suddenly those illiquid holdings started looking less like genius and more like a very expensive group project.

The Covid-era funds are the tricky part. A lot of private equity and venture funds raised money and bought assets when valuations were sky-high, capital was cheap, and every software company was somehow worth 30x revenue.

Many of those companies now need to be sold, refinanced, or marked down in a much tougher market. That means distributions could stay sluggish and Harvard may have to keep funding commitments into assets that are taking longer to pay out.

That matters because Harvard needs the money. Endowment payouts cover more than a third of operating revenue. The university is also dealing with federal funding cuts and a higher excise tax on endowment income starting in July. Only about 3% of the endowment, roughly $1.7 billion, sat in cash in 2025. The mismatch is obvious: rising cash needs on one side, long-dated illiquid assets on the other.

Takeaway: Harvard’s next endowment chief is not walking into a crisis, but they are walking into a cleanup. Narvekar pushed deeper into PE to catch elite peers, and for a while it worked. Now Harvard has a larger illiquid book, elevated unfunded commitments, slower exits, and a university that needs dependable cash. The question is no longer "can Harvard earn higher returns?" It's "can Harvard earn those returns while still having enough liquidity when the bills come due?"

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HEADLINES

Top Reads

• Goldman Sachs says on track for near-record M&A volumes in 2026 (Reuters)

• KKR expands Italian presence with planned Milan office opening (Yahoo Finance)

• Scoop: Groq raising $650 million for its second act (Axios)

• Why Microsoft AI chief Mustafa Suleyman predicts AI automation in 18 months (Fortune)

• New York's pied-à-terre tax passes (CNBC)

• Anthropic overtakes OpenAI as the most valuable AI startup (Axios)

• Caesars Entertainment agrees to $5.7 billion Fertitta takeover (BB)

• Court rules against Marc Rowan in Hamptons lobster shack dispute (FT)

• Dell shares jump 39% after server maker reports fastest sales growth since return to public market in 2018 (CNBC)

• Goldman Sachs COO calls inflation 'the single biggest risk element' to the economy (YF)

• Stop helping billionaires move out of New York City (WSJ)

• South Korea's stock market is a big leveraged AI bet (Axios)

• Core inflation hit an annual rate of 3.3% in April as expected, Fed's preferred gauge shows (CNBC)

• We're keeping too much cash in our accounts these days (WSJ)

• Snowflake stock surges 36% on AI frenzy, fueling software rally (CNBC)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities closed higher after the latest PCE inflation report came in largely in line with expectations

• The health care and technology sectors led gains, each rising more than 1%

• Technology benefited from strong software earnings, while health care sentiment improved following positive results from diagnostics companies

• The 10-year Treasury yield declined to 4.45%, while the 2-year Treasury yield finished at 4.02%

• WTI crude oil ended modestly higher near $89 per barrel after reports of progress in U.S.-Iran negotiations

• Economic data was mixed, with jobless claims remaining contained while first-quarter GDP was revised lower

Inflation Data Supports a Patient Fed

• Headline PCE inflation rose 0.4% month-over-month and 3.8% year-over-year, driven partly by higher gasoline prices

• Core PCE inflation, excluding food and energy, increased 0.24% for the month and 3.3% annually

• The three-month annualized pace of core PCE now sits at 3.8%, highlighting that inflation pressures remain elevated

• Despite sticky inflation, slower wage growth and a more balanced labor market support keeping policy unchanged

Strong Earnings Continue Supporting Markets

• The S&P 500 has rallied more than 18% since late March, while the Nasdaq has climbed roughly 28%

• Semiconductor stocks continue to lead, with the PHLX Semiconductor Index up around 80% since March lows

• Importantly, the rally appears to be driven more by earnings growth than expanding valuations

• First-quarter S&P 500 earnings growth is approaching 27% year-over-year, supported by both technology and cyclical sectors

Movers & Shakers

• (+) Unusual Machines ($UMAC) +57% after the WSJ reported the Trump administration is in active talks to provide direct federal funding to domestic drone makers.

• (+) Snowflake ($SNOW) +36% because the computer software company crushed fiscal Q1 estimates and announced a $6B five-year expansion deal with AWS.

• (–) Photronics ($PLAB) -36% after Q2 revenue of $209.9M and EPS of $0.42 both missed estimates, with the company citing delayed design releases from elevated fab utilization rates.

Prediction Markets

• Predict the price of gold by the end of today.

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Private Dealmaking

• Apollo is investing around $2 billion for a 20% stake in Apex Service Partners, a residential HVAC, plumbing and electrical services business

• Cognition, an AI coding company, raised $1 billion

• Groq is raising up to $650 million from existing investors

• Thea Energy, a stellarator fusion system developer, raised $100 million

• ClearNote Health, a developer of early-detection solutions for cancer, raised $52 million

• Orbital Industries, a data center infrastructure startup, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

Soccernomics

Description:
An updated edition of the classic sports economics book from Simon Kuper and Stefan Szymanski that explains soccer through the lens of data, incentives, and economics. The book explores why certain countries consistently outperform others, how talent systems create competitive advantages, and what statistics reveal about success in sports. Using the 2026 World Cup context, it revisits long-held assumptions and explains why soccer outcomes are often driven by structural factors more than passion or tradition.

Book Length: 416 pages
Release Date: May 5, 2026

Ideal For:
Sports fans, investors, and data-driven thinkers interested in how economics, incentives, and analytics shape competitive outcomes.

Winning is rarely random it is usually the result of systems incentives and long-term investment.

DAILY VISUAL

Temu is Back

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DAILY ACUMEN

Borrowed Conviction

There is a particular type of investor, common enough to be a recognizable archetype, who holds extremely confident positions on things they have not actually thought through themselves.

They are convinced because someone they respect is convinced. The conviction was downloaded, not derived. It feels exactly like the real thing right up until the moment the position moves against them, at which point they discover they have no internal framework for what to do.

This is one of the most expensive forms of laziness in finance, precisely because it looks like rigor. Sophisticated language, confident delivery, a thesis that holds up well in casual conversation. What it cannot do is survive contact with adversity, because there is nothing underneath it to fall back on when the easy story breaks.

Real conviction is built from the ground up. Borrowed conviction is just a position you don’t yet know, that you do not understand.

ENLIGHTENMENT

Short Squeez Picks

• The cost of toxic leadership in the workplace

• How to hold your failure

• Why the most productive people don’t work that hard

• The best compact espresso machines

• 6 ways to reduce anxiety in the workplace 

MEME-A-PALOOZA

Memes of the Day

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